Blue Test One Fall07

# Blue Test One Fall07 - This exam has 15 questions Each is worth 7 points It is printed on Blue paper Finance 3000 Test One 1 1 2 3 4 5 BLUE SPECIAL

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This exam has 15 questions. Each is worth 7 points. It is printed on Blue paper. Finance 3000 Test One BLUE SPECIAL CODE September 18, 2007 33333333 1 Find the approximate value of the following bond: \$1,000 par value; semi-annual payments; annual coupon rate of 5 percent; 20 year maturity; yield to maturity of 6 percent. 1) \$1,723.44 2) \$1,000.00 3) \$901.76 4) \$884.43 5) None of the above P/Y = 2 N = 40 I/Y = 6 PV = ??????? PMT = .05 * 1,000 ½ each payment (2 times a year) = 25 FV = 1,000 2 You have just graduated with \$35,000 of student loans. The terms of the loans call for monthly repayment over ten years. The interest rate is 6 percent. What is the amount of your monthly payment? 1) \$386.64 2) \$388.57 3) \$404.98 4) \$1,081.15 5) None of the above P/Y = 12 N = 12 pmts a yr for 10 yrs = 120 I/Y=6 PV = 35,000 PMT = ??? FV = Pay off balance, so FV = 0

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This exam has 15 questions. Each is worth 7 points. It is printed on Blue paper. 3 You have signed up for a “balloon mortgage”. The terms are that the bank will give you \$125,000 today and you will make monthly payments (based on 30-year amortization 5 percent APR) for the next 60 months. End of month payments. At the end of 5 years, you refinance the mortgage, paying off the balance on the original mortgage. What will be the amount due on the original loan? Round your answer to the nearest dollar. 1) \$8,131 2) \$10,214 3) \$114,603 4) \$114,786 5) None of the above P/Y = 12 N = 360 (monthly – 3*12) I/Y = 5 PV = 125,000 PMT = -671.03 FV = 0 P1 = 1 P2 = 5 th year would be 60 th pmt 4 You buy a 6 percent coupon, 20 year maturity bond with annual interest payments when the yield- to-maturity is 5 percent. Exactly one year later the yield-to-maturity is 6 percent
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## This note was uploaded on 04/07/2008 for the course FINANCE 3000 taught by Professor Staff during the Spring '08 term at Missouri (Mizzou).

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Blue Test One Fall07 - This exam has 15 questions Each is worth 7 points It is printed on Blue paper Finance 3000 Test One 1 1 2 3 4 5 BLUE SPECIAL

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